BEFORE THE TELANGANA STATE CONSUMER DISPUTES REDRESSAL COMMISSION: AT HYDERABAD.
C.C. No.55 of 2014
Between:
Smt Srivani Mullapudi
W/o Mr.Ranga Rao SRVK Mullapudi
Aged about 43 years, Occ: Business
R/o Plot No.40, Whisper Valley
HS Darga, Jubilee Hills,
Hyderabad-500020
*** Complainant
A N D
- M/s Emaar Hills Township Pvt Ltd.,
Boulder Hills & Country Club
Opp: ISB, Manikonda Village
Gachibowli, Hyderabad-500032
Rep. by its Managing Director
- M/s Emaar MGF Land Ltd.,
Boulder Hills & Country Club
Opp: ISB Manikonda Village
Gachibowli, Hyderabad-500032
Rep. by its Managing Director.
*** Opposite parties
Counsel for the Complainant: Sri V.Gourisankara Rao
Counsel for the Opposite Party No.1: M/s Shireen Sethna Baria
Counsel for the Opposite Party No.2: M/s Link Legal
QUORUM :
HON’BLE SRI JUSTICE B.N.RAO NALLA, PRESIDENT
&
SRI PATIL VITHAL RAO, MEMBER
THURSDAY THE TWENTY FIRST DAY OF SEPTEMBER
TWO THOUSAND SEVENTEEN
Oral Order : (per Hon’ble Sri Justice B.N.Rao Nalla, Hon’ble President)
***
This is a complaint filed under section 17(1)(a)(i) of the Consumer Protection Act, 1986 by the Complainant to direct the opposite parties to execute register agreement of sale/Sale Deed of Plot No.A-29 admeasuring 755 sq.yds together with compensation of Rs.5 lakhs and costs of Rs.50,000/-
2. In brief, the facts of the case, are that the opposite party no.1 allotted a tentative Plot No.56 admeasuring 1814 sft to the complainant in the proposed Boulder Hills Community and to that effect the complainant on 10.12.2005 paid an amount of Rs.1,00,000/- towards registration fee. Thereafter the complainant on 10.12.2005 paid an amount of Rs.8,07,000/- towards 10% of the total sale consideration. Accordingly on 19.12.2005 the opposite party no.1 executed MoU with the complainant. As per Clause no.2 of the MoU the opposite party no.1 has to develop the project as per the approvals, as per clause no.3 the opposite party no.1 shall provide all the necessary infrastructure, as per clause no.4 the opposite party no.1 shall handover the allotted plot to the complainant within a period of 12 months and as per clause no.5 after the development the opposite party shall serve a notice requesting the purchaser to take possession of the allotted plot. After receiving of 95% of the entire sale consideration i.e., Rs.86,16,500/- the opposite party no.1 shall execute an agreement of sale within a period of 45 days.
3. On 31.01.2008 the opposite party no.1 informed the complainant that they got layout approval from the competent authority and allotted Plot No.A-29 admeasuring 755 sq.yds to the complainant. The opposite party no.1 requested the complainant to pay Rs.26,79,250/- which shall aggregate to 95% of the cost of the plot and accordingly on 08.04.2009, the complainant paid Rs.5,00,000/- and subsequently an amount of Rs.21,79,250/- to the opposite party no.2 and thus the complainant in total paid Rs.35,86,250/- towards 95% of the total cost of the plot. Thereafter, the complainant several times requested the opposite parties to register the plot and expressed her willingness to pay the balance 5% of the sale consideration amount. The complainant also submitted representations dated 16.09.2010, 06.01.2012 and 21.11.2013 requesting the opposite party no.1 for registration of the plot but the opposite parties have been postponing the same on one pretext or the other. Though the complainant was always ready and willing to pay the balance 5% of sale consideration to the opposite parties the opposite parties are not coming forward to execute the agreement of sale/sale deed which amounts to deficiency of service on the part of the opposite parties. Hence, the complaint with the reliefs as prayed for in the paragraph no.1 supra.
4. The opposite party no.1 filed its written version and contended that the relief sought by the complainant would not be covered under the C.P.Act, falls outside the scope of the Commission and therefore the complaint is not maintainable. The then Govt. of A.P. through its nodal agency Andhra Pradesh Industrial Infrastructure Corporation Limited (“APIIC”) i.e., opposite partyno.2 invited the Expression of Interest (“ EOI”) for the development of the integrated projects in A.P. which would include a township, golf course and mixed-used project and a convention centre-cum-exhibition complex with a business hotel to boost the tourism and business in the State. APIIC accorded approval to Emaar Properties PJSC, Dubai for development and construction of township as a part of Integrated Project, spread over 285 acres of land at Manikonda Village, Rajendranagar Mandal, Ranga Reddy District. Emaar Properties PJSC, Dubai and APIIC have executed various agreements in furtherance of the integrated project, having formulated the principal terms under an MOU dated 06.11.2002, Collaboration Agreement dated 19.11.2003 and Supplementary Agreement dated 19.04.2005. In furtherance of the Collaboration Agreement, Emaar Properties PJSC, Dubai incorporated a wholly owned subsidiary company under the laws of Mauritius under the name and style of Emaar Holding, which in turn, has incorporated three Companies as Special Purpose Vehicles (SPVs) namely (i) Emaar Hills Township Private Limited i.e., opposite party no.3 herein; (ii) Boulder Hills Leisure Private Limited; and (iii) Cyberabad Convention Centre Private Limited for carrying out the development work of the different components of the integrated project.
5. Opposite party no.1 further submits that in December 2005, opposite party no.2 transferred land admeasuring Ac.258.36 acres at Manikonda village in Rajendranagar Mandal, Gachibowli and Nanakramaguda Village in Serlingampally Mandal, R.R.Dist. in favour of opposite party no.3 in lieu of its equity contribution with clear and free title vide Registered Deed of Conveyance dated 28.12.2005. In the month of September 2006, the projects handled by opposite party no.3 had reached a critical stage with limitation on amount of debt that could be raised. There could not be any internal accruals as there was inordinate delay in commencement of project due to the pending litigation which was finally decided in favour of opposite party no.3 by the Hon’ble Supreme Court. Therefore, opposite party no.1 through its Board of Directors which include two nominee directors of opposite party no.2 had consented and decided to adopt alternate means of finance to develop the land. At this point of time, one of the options considered by opposite party no.1 was increase of equity by the shareholders and consequent infusion of funds by them. Alternatively, opposite party no.3 had also received a proposal from opposite partyno.4 for the development and construction of the project at its cost and risk. In the absence of any increase of equity by APIIC or any other alternative mode of raising finances for implementing the concerned project, it was unanimously agreed by the Board of Directors of opposite party no.1 to enter into a development agreement with opposite party no.2 for developing township and to infuse/manage additional cost for the project and also to bear the cost of the entire project.
6. Opposite party no.1 further submits that accordingly a development agreement dated 03.11.2006 was executed between opposite partyno.1 and opposite partyno.2. The said development agreement was later cancelled and replaced by a fresh duly registered Development Agreement-cum-General Power of Attorney dated 25.07.2007 to develop the said land for the integrated township “ Boulder Hills”. Immediately after the execution of the Development cum General Power of Attorney opposite party no.2 undertook development of the concerned project component of the integrated project at its own cost and expense by means of its own resources or through debts raised by it. The execution of the development works by opposite party no.2 was well within the knowledge of APIIC since very beginning.
7. Opposite partyno.1 further submits that in the said backdrop, the complainants have entered into various agreements viz Sale agreement and construction agreement with opposite party no.1 as owner of the land and opposite party no.2 as developer. The parties are bound by the covenants mentioned as “ Articles” in both the agreements. The Sale Agreement inter-alia covers such as, allotment, undivided share in the land and semi-finished Apartments, Construction and Operation and Maintenance, original Sale deed, default in payments and Developer cum GPA’s lien, Rates & Taxes, Force Majeure, Governing Law and disputes resolution, Schedule of property etc. Whilst, the construction agreement inter-alia covers covenants like approvals, apartment specifications, construction schedule, payments, deposits, interior works, purchasers default and termination, Developer cum GPA’s default, purchasers covenants, general clauses including notices & force majeure, dispute resolution process etc. While the matter stood thus, all of a sudden after more than three years from the execution of Development cum General Power of Attorney agreement as well completion and/or pending development works by opposite party no.2, APIIC, in order to cover itself, has raised illegal, baseless and wrong allegations against SPV’s in regard to the Integrated Township project. The row of disputes had led the parties, i.e.APIIC and SPV’s into legal embarrassing situation and one such consequence led to an issuance of notification vide Memo No.G1.9132 dated 18.08.2010 and Go.Ms.No.1279 dated 08.10.2010 issued by the Govt. of the then A.P. wherein, the Govt. prohibited registration of documents in the said properties in exercise of powers conferred under Sec.22-A of the Registration Act, 1908. Aggrieved by the said G.O. dated 18.10.2010Excelsior Owners Welfare Association filed W.P.No.17618 of 2011 before the Hon’ble High Court and obtained suspension of the said GO. Similarly Boulder Hills Villas Owner Association also filed another WP NO.20098/11 for the same relief. One Mr.K.Bharat individual Villa owner also filed P No.5143/2012 for the same relief. Subsequently, the High Court modified the above orders and granted conditional order to register the documents for the petitioner therein. Aggrieved by the same APIIC filed W.A.No.497 of 2012, Govt. of the then A.P. filed W.A.No.647 to 649 of 2012 and the orders for registration of documents passed in the above said writ petitions were stayed. The opposite party no.1 also filed W.P.No.7978 and 813 of 2012 which were pending in High Court for disposal.
7. Opposite party no.3 further submits that Shri P.Shanker Rao, MLA addressed a letter to Chief Justice of High Court. The said letter was taken up as WP NO.29358/2010 by the High Court and after hearing directed CBI to register an FIR and investigate into the alleged incidents. Accordingly the CBI conducted investigation and filed charge sheet in CBI Court at Nampally which is registered as CC No.6 of 2012 which is pending. APIIC also filed a suit O.S.No.655 of 2010 before II Additional Chief Judge, City Civil Court, Hyderabad against opposite party no.4 seeking rendition of accounts and permanent injunction from carrying on any work or activity in the suit schedule property. In the suit, APIIC also filed interlocutory petition seeking ex-parte ad-interim injunction and the court has passed order directing the parties to maintain “status quo with regard to the suit schedule property”. Because of the aforementioned events and due to the embargo created by Courts and State Government notification, the project has become stand still.
9. Opposite party no.1 submits that it is informed to the complainant that subsequent to the execution of MOU, certain portion of the Project Land has become subject matter of litigation in A.P.High Court and A.P.Wakf Tribunal and the terms of the letter and MOU are subject to the said litigation and further due to the embargo created by the Courts and necessary State Government notification as mentioned in the fore-going paragraphs, opposite parties are unable to execute either agreement of sale or sale deed in favour of the complainant. The dispute between the parties does not attract deficiency/unfair trade practice of service and is purely civil in nature with the specific performance of contract and that a claim for specific performance for the agreement would lie only before the competent Civil Court and not before the State Commission. The complaint is barred by limitation as the limitation for filing consumer complaint under C.P. Act expired on 17.12.2011. The Commission has no jurisdiction to entertain the complaint. Hence, the opposite party no.3 prayed for dismissal of the complaint against it.
10. Opposite party no.2 filed written version with most of the same contents as was stated by the opposite party no.3 in its version. It is submitted that the names of various plot owners (including the complainant) find a mention in the charge sheet filed by CBI before the CBI Court. Similarly, the Enforcement Directorate is also investigating the case. In such view of the matter and despite knowing the facts, the complainant has chosen to file the present complaint as a test case. While denying the allegations made by the complainant further contended that the opposite party no.2 is not a party to the MOU and therefore cannot reply to the same for want of knowledge. It was further stated that the Opposite Party was neither deficient, in rendering service nor indulged into unfair trade practice and hence sought for dismissal of the complaint.
11. The complainant filed her affidavit evidence and Exs. A1 to A4 are marked on her behalf. Opposite party no.1 filed affidavit of Sri Madhusudhan Rao, Authorised Signatory and got marked Exs.B1 to B13. Opposite party no.2 filed affidavit of its Deputy General Manager-Legal and the documents Exs.B14 to B18 are marked.
12. The counsel for the Complainant and the Opposite parties had advanced their arguments reiterating the contents of the complaint and the written version in addition to filing written arguments. Heard both sides.
13. The points that arise for consideration are :
- Whether the complaint is maintainable in view of arbitration clause in the MoU ?
- Whether the complaint is barred by limitation?
iii) Whether the complaint is not a ‘consumer dispute’?
iv) Whether there is any deficiency in service on the part of the
Opposite parties?
v) To what relief ?
14. Point No.1 The first question, that falls for consideration, is, as to whether, the consumer complaint under Section 17 of the Act, is not maintainable, before this Commission, on account of the existence of an arbitration Clause in the MOU dated 19.12.2005 Ex.A2. With a view to appreciate the controversy, in its proper perspective, reference to Section 3 of the Consumer Protection Act, 1986, is required to be made, which reads as under ;
"3.Act not in derogation of any other law.
The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force."
15. Section 3 of the Act, is worded in widest terms, and leaves no manner of doubt, that the provisions of the Act, shall be, in addition to, and not in derogation of any other law, for the time being, in force. The mere existence of an arbitration Clause, in the MOU dated 19.12.2005, Ex.A2 would not oust the Jurisdiction of this Commission, in view of the provisions of Section 3 of the Act. In a catena of decisions of the Hon'ble Supreme Court, it has been held that even if there exists an arbitration clause in the agreement/MOU and a Complaint is filed by the consumer, in relation to certain deficiency of service, then the existence of an arbitration clause will not be a bar for the entertainment of the Complaint by a Consumer Fora, constituted under the Act, since the remedy provided under the Act is in addition to and not in derogation of the provisions of any other law for the time being in force. In “National Seeds Corporation Ltd., Vs. M.Madhusudhan Reddy reported in (2012) 2 SCC 506 wherein the maintainability of the complaint before consumer forum prior to the complainants having exhausted the other remedy was considered as under:
“The remedy of arbitration is not the only remedy available to a grower. Rather, it is an optional remedy. He can either seek reference to an arbitrator or file a complaint under the Consumer Act. If the grower opts for the remedy of arbitration, then it may be possible to say that he cannot, subsequently, file complaint under the Consumer Act. However, if he chooses to file a complaint in the first instance before the competent Consumer Forum, then he cannot be denied relief by invoking Section 8 of the Arbitration and Conciliation Act, 1996 Act. Moreover, the plain language of Section 3 of the Consumer Act makes it clear that the remedy available in that Act is in addition to and not in derogation of the provisions of any other law for the time being in force.”
16. Thus, in view of the ratio laid in aforementioned decision, the consumer has two options, either to proceed for arbitration process or to invoke the provisions of the Consumer Protection Act. As such, it cannot be said that the complaint is not maintainable before this Commission in view of the arbitration clause in the agreement. For the above reasons, the Point No.1 is answered in favour of the Complainant and against the Opposite parties.
17. Point No.2: The next question which arises for our consideration in this case is as to whether the complaint is barred by limitation or not. Section 24A of the Consumer Protection Act provides a limitation of two years from the date of accrual of the cause of action in filing a complaint before a Consumer Forum. Admittedly, the possession of the plot was to be delivered to the complainants within a period of 12 months from the date of execution of the MOU. It was held by the Hon'ble Supreme Court in Meerut Development Authority Vs. M.K. Gupta IV (2012) CPJ 12 that a buyer has a recurrent cause of action for filing a complaint for non-delivery of possession of the plot. A consumer books a residential flat for the purpose of having a shelter over his head and not for the purpose of taking refund at later date with or without interest. If the builder performs all his contractual obligations under the sale agreement, the buyer in such a case would have no right to claim refund and will be entitled only to possession of the flat as per the terms and conditions agreed between the parties. It is only in a case where the builder fails to perform his contractual obligations and deliver possession of the flat to the buyer that he would have a cause of action to seek refund of the money which he has paid to the builder, along with appropriate compensation in the form of interest or otherwise. It would be unrealistic to expect a flat buyer to seek refund of the sale consideration paid by him, immediately on expiry of the time period agreed between the parties for delivery of the possession of the flat to him. His purpose behind taking the flat being to have a shelter over his head, he would like to give some more time to the builder in order to enable him to complete the construction and deliver possession of the flat. It is only when he finds that the builder is unable or unwilling to complete the construction and deliver possession to him within a reasonable time from the last date stipulated for delivery of possession that he would ask the builder to refund the sale consideration paid by him. Therefore, in such a case, the date on which the refund is demanded by the flat buyer for the first time will be the date from which the period of limitation prescribed in Section 24A of the Consumer Protection Act has to be computed, unless the builder has even before the flat buyer asking for a refund, expressed his inability or unwillingness to complete the construction and deliver possession to him. Admittedly, in the present case, the complainant did not seek refund of the sale consideration paid by her, in fact she seeks execution of agreement of sale/registration of the sale deed , within two years prior to filing of this complaint. Admittedly, at no stage, the opposite parties expressed their inability or unwillingness to deliver possession of the plot or to give refund to the complainant. In Lata Construction & Ors. Vs. Dr. Rameshchandra Ramniklal Shah And Anr., II 2000 (1) CPC 269=AIR 1999 SC 380, wherein, the facts and circumstances were similar to the one, involved, in the instant case, it was held that there was a continuing cause of action, and the complaint was not barred by time. In Meerut Development Authority Vs. Mukesh Kumar Gupta, IV (2012) CPJ 12 (SC), the complainant applied for a plot, in the year 1992, on the basis of inducement made in the advertisements of the petitioner, knowing fully well, that the land, in question, was under litigation. Consumer Complaint was filed, in the year 2009, claiming relief of execution of the sale deed, which was granted to him. An objection was taken that the complaint was barred by time. The Hon`ble Supreme Court held that there was a continuing cause of action, and, as such, the complaint was not barred by time. The principle of law, laid down, in the aforesaid cases, is fully applicable to the facts of the instant case. Under these circumstances, it is held that the complaint was not at all barred by time. Therefore, it would be difficult to say that the complaint is barred by limitation prescribed in Section 24A of the Consumer Protection Act.
18. Point No.3 and 4: The next question, that falls for consideration is, as to whether the complainants fell within the definition of consumer or not? The Counsel for the Opposite Parties submitted that the complaint is not maintainable as the complainant has failed to show the existence of any deficiency of service or unfair trade practice on the part of the opposite party no.1. This submission of the Counsel for the Opposite Parties, does not appear to be correct. The plot which was allotted, in favour of the complainant, is a residential one. Undisputedly the complainant applied for the allotment of a plot, which was allotted to her. She deposited a sum of Rs.35,86,250/- from time to time towards the price of plot. Memorandum of Understanding dated 19.12.2005 Ex.A2 was executed between the parties at Hyderabad in respect of plot No.A-29 approximately measuring 755 Sq. yds in the proposed Boulder Hills Community. According to clause 5 of this Memorandum of Understanding dated 19.12.2005, the Opposite Parties were to deliver possession of the plot, in question, in favour of the complainant, within a period of 12 months. It means that the possession of the plot, in question, was to be delivered to the complainant, by the Opposite Parties, on or before 19.12.2006. Admittedly, the possession of this plot was not delivered to the complainant. By not delivering the possession of the plot which was allotted to the complainant within 12months, the stipulated date the Opposite Parties miserably failed to abide by the commitment. The Opposite Parties duped the complainant of her hard earned money, by making misleading statements that possession of the plot shall be delivered by the stipulated date, but failed to do so. They, thus, indulged in unfair trade practice. Therefore, the complainant is entitled to the possession of Plot No.A-29 along with Agreement of Sale/Registration of the Sale Deed complete in all respects.
19. The opposite party no.2 contended that the complainant has failed to establish cause of action qua the opposite party no.2 inasmuch as the agreement referred to in the complaint is executed between the complainant and opposite party no.1. The case of opposite party no. 1 in this regard is that since it is not the party in the MOU and as such there is no privity of contract between the complainant and opposite party no.2 the complainant cannot be said to be its consumer. We however, find no merit in this contention. Admittedly, the complainant paid an amount of Rs.26,79,250/- to the opposite party no.2 and as such both the OPs were liable for the consequences. Therefore, both of them are bound by the terms and conditions of the said MOU and accordingly, under a contractual obligation, to deliver possession of the plot to the complainant within one year. We therefore, have no hesitation in holding that the complainant is the consumer of both the opposite parties.
20. The next question which arises for our consideration is as to whether this Commission has jurisdiction to entertain and adjudicate upon the dispute involved in this complaint, the complaint is manifestly outside the purview of the Act. The complaint is baseless and flagrant abuse of process of law. The compliant is false, frivolous and vexatious and liable to be dismissed. The Hon'ble Supreme Court in Civil Appeal No. 331 of 2007 titled as Ganeshlal Vs. Shyam wherein it was held that where there is sale of land simpliciter, it is not covered under the definition of 'services' or 'deficiency'
21. We may state here that the sale is not open to any general buyer but restricted only to the persons who have joined as members on payment of the stipulated fee. The members should abide by the terms and conditions set out by the seller. The sale is not on "as it is where it is" basis. The terms and conditions stipulated for sale of only developed plots and the registration of the plots would be made after the sanction of lay out by the concerned authorities. The sale price was not for the virgin land but included the development of sites and provision of infrastructure.
22. The Hon’ble Supreme Court in a similar case in State of Gujarat & ANR. Vs. Hon'ble Mr. Justice R.A. Mehta (Retd.) & Ors. [Civil Appeal Nos. 8814-8815 of 2012 S.L.P(C) Nos. 2625-2626 of 2012 & 2687-2688 of 2012] has observes as follows:
The opposite party has undertaken the obligations to develop the plots and obtain permissions/approvals of the lay outs. The opposite party itself pleaded in its counters that the plots were developed by spending huge amounts and subsequent to the amounts paid by the complainants also plots were developed. It pleaded that huge amounts were spent towards protection of the plots from the grabbers and developed roads, open drains, sewerage lines, streetlights etc. It is therefore, manifest that the transaction between the parties is not a sale simplicitor but coupled with obligations for development and provision of infrastructure. Inevitably, there is an element of service in the discharge of the said obligations."
In Lucknow Development Authority"s case (supra) this Court while dealing with the meaning of the expressions "consumer" and "service" under the Consumer Protection Act observed that the provisions of the Act must be liberally interpreted in favour of the consumers as the enactment in question was a beneficial piece of legislation. While examining the meaning of the term "consumer" this Court observed: "The word 'consumer' is a comprehensive expression. It extends from a person who buys any commodity to consume either as eatable or otherwise from a shop, business house, corporation, store, fair price shop to use of private or public services.
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5. In the context of the housing construction and building activities carried on by a private or statutory body and whether such activity tantamounts to service within the meaning of clause (o) of Section 2(1) of the Act, the Court observed: "As pointed out earlier the entire purpose of widening the definition is to include in it not only day to day buying and selling activity undertaken by a common man but even such activities which are otherwise not commercial in nature yet they partake of a character in which some benefit is conferred on the consumer. Construction of a house or flat is for the benefit of person for whom it is constructed. He may do it himself or hire services of a builder or contractor.
The latter being for consideration is service as defined in the Act. Similarly when a statutory authority develops land or allots a site or constructs a house for the benefit of common man it is as much service as by a builder or contractor. The one is contractual service and other statutory service. If the service is defective or it is not what was represented then it would be unfair trade practice as defined in the Act. Any defect in construction activity would be denial of comfort and service to a consumer. When possession of property is not delivered within stipulated period the delay so caused is denial of service.
Such disputes or claims are not in respect of Immovable property as argued but deficiency in rendering of service of particular standard, quality or grade. Such deficiencies or omissions are defined in Sub-clause (ii) of Clause (r) of Section 2 as unfair trade practice. If a builder of a house uses substandard material in construction of a building or makes false or misleading representation about the condition of the house then it is denial of the facility or benefit of which a consumer is entitled to claim value under the Act.
When the contractor or builder undertakes to erect a house or flat then it is inherent in it that he shall perform his obligation as agreed to. A flat with a leaking roof, or cracking wall or substandard floor is denial of service. Similarly when a statutory authority undertakes to develop land and frame housing scheme, it, while performing statutory duty renders service to the society in general and individual in particular." (emphasis supplied)
6. This Court further held that when a person applies for allotment of building site or for a flat constructed by development authority and enters into an agreement with the developer or a contractor, the nature of the transaction is covered by the expression "service" of any description. The housing construction or building activity carried on by a private or statutory body was, therefore, held to be "service" within the meaning of clause (o) of Section 2(1) of the Act as it stood prior to the inclusion of the expression "housing construction" in the definition of "service" by Ordinance No.24 of 1993.
7. In the light of the above pronouncement of this Court the High Court was perfectly justified in holding that the activities of the appellant- company in the present case involving offer of plots for sale to its customers/members with an assurance of development of infrastructure/amenities, lay-out approvals etc. was a "service" within the meaning of clause (o) of Section 2(1) of the Act and would, therefore, be amenable to the jurisdiction of the for a established under the statute.
Having regard to the nature of the transaction between the appellant- company and its customers which involved much more than a simple transfer of a piece of immovable property it is clear that the same constituted "service" within the meaning of the Act. It was not a case where the appellant-company was selling the given property with all advantages and/or disadvantages on "as is where is" basis, as was the position in U.T. Chandigarh Administration and Anr. v. Amarjeet Singh and Ors. (2009) 4 SCC 660.”
It is a case where a clear cut assurance was made to the purchasers as to the nature and the extent of development that would be carried out by the appellant-company as a part of the package under which sale of fully developed plots with assured facilities was to be made in favour of the purchasers for valuable consideration. To the extent the transfer of the site with developments in the manner and to the extent indicated earlier was a part of the transaction, the appellant-company had indeed undertaken to provide a service. Any deficiency or defect in such service would make it accountable before the competent consumer forum at the instance of consumers like the respondents.
23. In view of the above decisions of the Hon’ble Supreme Court, admittedly, the project floated by the opposite parties could undoubtedly attract the provisions of the Consumer Protection Act. The dispute pertains to housing activity. When the opposite parties themselves admit that they have executed MOU, Ex.A2 the question of not having jurisdiction, more so in the light Section 2(1) (o) the dispute attracts the provisions of the Consumer Protection Act.
24. The Hon’ble Supreme Court in Bangalore Development Authority v. Syndicate Bank (2007) 6 SCC 711, also dealt with the nature of the relief that can be claimed by consumers in the event of refusal or delay in the transfer of the title of the property in favour of the allottees/purchasers and observed: "Where full payment is made and possession is delivered, but title deed is not executed without any justifiable cause, the allottee may be awarded compensation, for harassment and mental agony, in addition to appropriate direction for execution and delivery of title deed."
25. The counsel for the opposite party no.2 has filed several citations which are as follows:
- Dr.VN Shrikhande Vs Anita Sena Fernandes reported in (2011)1SCC 53
- Richard Raja Singh vs Ford Motor Company Ltd., reported in IV (2014) CPJ 509 (NC)
- R.Vishwanatha Pillai Vs State of Kerala and Ors reported in (2004) SCC (LS) 350
- K.D.Sharma vs Steel Authority of India Ltd., and Ors reported in (2008) 12 SCC 481
- Welldone Estate Projects Pvt Ltd., Vs Today Homes & Infgrastructure Pvt Ltd., reported in 178 (2011) DLT 118
- L.Shiv Daya Kapoor and Ors vs Union of India, New Delhi and Anr reported in AIR 1963 P&H 538
- Narmada Bachao Andolan Vs State of Madya Pradesh reported in (2011) 7SCC 639
- In the case of V.N. Shrikhande (Dr.) Versus Anita Sena Fernandes the Honble Supreme Court has held that “the consumer forums not to have the jurisdiction to entertain a complaint if the same is not filed within 2 years from the date on which the cause of action has arisen. This power is required to be exercised after giving opportunity of hearing to the complainant, who can seek condonation of delay under Section 24A(2) by showing that there was sufficient cause for not filing the complaint within the period prescribed under Section 24A(1). If the complaint is per se barred by time and the complainant does not seek condonation of delay under Section 24A (2), the consumer forums will have no option but to dismiss the same”.
The Hon’ble National Commission has followed the above judgment in the case of Richard Raja Sing’s case .
- In Viswanatha Pillai’s case the Hon’ble Supreme Court held that “ a person who seeks equity must come with clean hands. He who comes to the Court with false claims cannot plead equity nor would the Court be justified to exercise equity jurisdiction in his favour. A person who seeks equity must act in a fair and equitable manner”.
3. In K.D.Sharma’s case the Hon’ble Supreme Court held that where if the petitioner makes false statement or conceals material facts or misleads the court the court may dismiss the petition at the threshold without considering the merits of the claim.
4. In the case of Welldone Estate Projects the Delhi High Court held that the doctrine of privity in the common law of contract provides that a contract cannot confer rights or impose obligations arising under it on any person or agent except the parties to it.
5. In L.Shiv Dayal Kappor’s case the High Court of Punjab and Haryana held that no man can enforce a contract to which he is not a party, even though he has direct interest in the performance of it.
6. In Narmada Bachao Andolan’s case the Hon’ble Supreme Court held that where the law creates a duty or charge, and the party is disabled to perform it, without any fault on his part, and has no control over it, the law will in general excuse him. Even in such a circumstances, the statutory provision is not denuded of its mandatory character because of the supervening impossibility caused therein.
26. The decisions cited by the opposite party no.2 are not at all relevant as the fundamental jural relationship of consumer and service provider between the complainant and the opposite parties has been established. They are equally parties to the contract and nothing more than that. Even the decisions relied upon by him are of no help as they did not deal with this fundamental question which has already been observed goes to the root of the matter.
27. Keeping in view the aforementioned reasons, we are of the considered opinion that in view of the admission of the opposite party no.1 in Ex.A1 letter that after the receipt of entire amount they shall execute the “agreement to sell” the plot in favour of the complainant and therefore, opposite parties are liable to execute “Agreement to Sell /Register the sale deed together with compensation of Rs.1,00,000/- towards mental agony and costs .
In the result the complaint is allowed directing the opposite parties no.1 and 2 jointly and severally liable to execute “Agreement to Sell”/Register the Sale Deed in favour of the complainant together with compensation of Rs.1,00,000/-, on account of mental agony and physical harassment, caused to the complainant. The opposite parties are further directed to pay costs of Rs.5,000/-. Time for compliance four weeks.
PRESIDENT MEMBER
21.09.2017
APPENDIX OF EVIDENCE
WITNESSES EXAMINED
NIL
EXHIBITS MARKED
For complainant
Ex.A1 Copy of letter dated 31.07.2008
Ex.A2 Copy of MOU dated 19.12.2005
Ex.A3 Copy of letter dated 08.04.2009
Ex.A4 Copy of letter dated 17.12.2009
For opposite party no.1
Ex.B1 Copy of Collaboration Agreement dated 19.08.2003
Ex.B2 Copy of Supplementary Agreement dated 19.05.2005
Ex.B3 Copy of Conveyance Deed dated 28.12.2005
Ex.B4 Copy of Development cum GPA dated 25.07.2007
Ex.B5 Copy of Plaint in OS No.99 of 2007
Ex.B6 Copy of Copy of Plint in OS No.07 of 2011
Ex.B7 Copy of petition in IA No.24 of 2011
Ex.B8 Copy of order in IA No.24 of 2011 dt.28.03.2011
Ex.B9 Copy of GO Ms.No.1279 dt.08.10.2010
Ex.B10 Copy of Plaint in OS No.655 of 2010
Ex.B11 Copy of Petition in I.A.No.3941 of 2010
Ex.B12 Copy of order in IA No.3941 of 2010
Ex.B13 Copy of petition in CP No.108/2010
For opposite party no.2
Ex.B14 Copy of Board Resolution dated 27.03.2014
Ex.B15 Copy of G.O.Ms No.1279 dt.08.10.2010
Ex.B16 Copy of Order in WPMP No.21190 of 2011 dt.04.07.2011
Ex.B17 Copy of order in WPMP No.21190 dt.13.03.2012
Ex.B18 Copy of order in WA No.497/2012 dt.24.04.2012
PRESIDENT MEMBER
